The latest market rumor is that Europe is on the verge of instituting a pan-continental naked short-selling ban, primarily focusing on killing CDS trading which Germany has had success in bringing other countries over to her perspective. Incidentally yesterday Greek CDS ended the day 40 bps higher, once again proving that market regulation left in the hands of politicians will always backfire. Also in the rumor column: France to institute 3 year public sector wage freeze. We know what a "storming" of any particular building in Paris tends to result in. Conviction pair trade of the day: long guillotine manufacturers, short Goldman "conviction buys" (the latter is a given natural short hedge to any long trade).

Well, if you agree with the principle, you should short sell CDS contracts on me! That will furthermore "add liquidity to the system".

Or, perhaps we could wrap up these CDS contracts into a synthetic CDO, create a hedge fund to market these, float on the market, and then buy call options on the symbol, as I expect more profits (and more "liquidity") as I expect to torch MORE, higher-insured cars.

Or perhaps buy put options, as you'd expect at some point, the law and order catches up with this blatant fraud, and puts me in jail for some serious amount of time?

Except, of course, we can't do that, as it would take all this "liquidity" away! Bulletproof plan!

Why can't I borrow a friend's used car and sell it, if I think I can buy him an equally good or better replacement of the same model later, supposing he wants it back? Its all good as long as I maintain the wherewithal to replace the car should he want it back.

I would be surprised if Germany would not succeed in "winning over" other EU countries to join them in the ban. Just imagine what would happen if by some unlucky coincidence the German parliament would not agree to the bailout!

I want to see genuine free markets, not half-free, or half-free with government backing of TBTF, or etc etc. How did the big banks get so big that they can challenge the power of governments? Not through free-market mechanisms, I guarantee you. They got that way through corruption, bribery, kickbacks, etc. I want genuine free markets.

But a genuine free market still need regulations. Banks that are TBTF got this way because governements failed in their duties, which are to provide robust legal frameworks preventing excessive speculation and excessive concentration of banking powers.

Since the banks were TBTF in 2007, the only logical conclusion was to nationalize them, fire the Bernie Madoff clowns that were running them and break them up into as many smaller pieces as possible. But the TBTFs have become the robber barons of their time, with their fingers in as many pies as possible, including running crucial parts of the government. For instance, is it at all surprising that Henry Paulson, the former CEO of Goldman Sachs, became the U.S. Treasury Secretary? The fox guarding the henhouse has got nothing on these guys.

There was a reason the Glass-Steagall Act was voted and there also was a reason the same act was repealed. Re-read that sentence slowly and let it sink in for a moment.

Let us be honest: the sh*t has hit the fan a long time ago. Since the TBTF are now running amok over the world's markets, it's time to forget good manners and kick them in the nuts before the whole thing comes crashing down. Banning short selling is a very good step in that direction. Kudos to the Germans.

Tyler, why are you pro naked short selling?!?! Are you in the synthetic credit default swap market or what? If the regulators won't prevent naked shorting, should not the government step in and enforce the law? If the market crashes because of it, so be it.

Tylers comments arent pro naked short, he is merely relating the possibility that some market participants are pro-naked short selling, and that their response to the restriction of NSS is to leave the market, leading to the market falling.

Just because a person claims/discovers an action has a negative consequence doesnt mean said person is automatically against that action.

FED is just price fixing, leading to malinvestment and demanding periodic creative destruction to correct. We should see what life without the FED is like.

Im not sure a gold based currency is the way to go, although sometimes to move forward you need to go backwards.

I read somewhere that currency was essentially a claim on human labour, but machines now do all the work. So maybe we need to start thinking like E=MC2, and that currency is a claim on energy. We should consider an energy backed currency.